PRIVATE EQUITY: Shifting ESG Due Diligence in PE Deals

Traditionally, ESG (Environmental, Social, Governance) due diligence in Private Equity (PE) deals has been viewed narrowly – primarily as a tool for risk mitigation and compliance cost estimation. However, this perspective is rapidly changing. Increasingly, PEs are recognizing ESG due diligence as a critical driver of long-term value creation.

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In a recent survey, focused on India and South East Asia, by the Singapore Venture & Private Capital Association and Alvarez & Marsal (SVCA A&M ESG Value Creation Survey 2024); 93 percent of the respondents integrate ESG in their pre-acquisition due diligence. They place equal focus on identifying sustainability risk factors and identifying opportunities for long-term ESG value creation.

GLOBAL ESG PRIORI-TIES VARY BY REGION